Expert Mortgage Advice
Taking out a mortgage is a big financial commitment, so it helps to know a little more about what’s on offer, what your options are, and how the process works.
Finding the right deal is important. Whether you’re new to the mortgage market, or you’ve had a mortgage for a while but are considering a move, this guide sets out a few facts and gives important information to help you make the right choices.
We’ll also explain how we can help you successfully navigate the mortgage market and ensure you get the right deal for your financial circumstances.
Choosing the right sort of mortgage to meet your needs and circumstances can seem a bit overwhelming. There are many different types to choose from, all meeting the needs of different types of borrowers. Your adviser will be able to help you by explaining what’s on offer, what the key features are, and what type of mortgage best meets your individual circumstances.
Before you start arranging property viewings, the big question is always “How much can I borrow?” In the past, the answer to this would have been a rule-of-thumb multiple based on your salary, or your joint salaries if you were buying with someone else.
Post credit crunch and the financial crisis, mortgage lenders were required by the Financial Conduct Authority (the regulator of the financial services industry), to adopt an affordability-based approach to lending. This means that banks and building societies are now required to scrutinise borrowers’ incomes, outgoings and credit history closely and apply strict affordability criteria, ensuring that borrowers can comfortably afford their repayments now, and in the foreseeable future.
This is where your mortgage adviser fits in. Although lenders are all bound by the same general principles and criteria, there are slight variations in the way they apply them. So it really pays to work with a mortgage adviser. Their knowledge of the market and understanding of the approach adopted by individual lenders means they can help you present your application in a positive light, to the right lender, saving you time and stress.
The bigger the deposit, the better the deal
Having a large deposit really matters in the current market. Typically the more you can put down, the lower the interest rate you are likely to be offered.
While lenders may be prepared to lend purchasers up to 95% of the property price, with the borrower putting in the remaining 5% as a deposit, better deals and rates are available to those who can put down, say, 20% or even more.
If you’re thinking of remortgaging, and the equity in your property (the difference between the value of your property and the amount of mortgage you have left to repay) has increased, then you can use it as a larger deposit and secure a lower mortgage rate.
This is where our adviser’s knowledge of the marketplace really helps. They will be able to provide examples that illustrate what you’d pay, depending on how much deposit you’re able to provide.
Mortgages come in all shapes and sizes, and from time to time, lenders offer borrowers a range of added extras.
A Free Valuation
Some lenders offer a fee-free standard valuation carried out by their chosen surveyor as part of their mortgage deal. This could save around £200 in upfront costs when purchasing a property. These deals are often available both to purchasers and those remortgaging their property.
As an alternative to free valuations, some lenders will charge the valuation fee upfront, but will then refund the fee in full on completion. Furthermore, certain lenders will refund your valuation fee if for any reason your house purchase falls through, and you go on to purchase another property with a mortgage from the same lender.
“Each year we help many people across the UK find the most cost-effective and appropriate mortgage deal for their individual financial circumstances, so you’ll find us knowledgeable, approachable and friendly to deal with.”
This type of mortgage arrangement means that you receive a cash sum once your purchase has been completed and your mortgage is in place. This incentive sometimes requires the borrower to have a current or savings account with the lender. The amount you receive is normally expressed as a percentage of the amount you have borrowed and is designed to help out with costs associated with moving house.
Here, the lender will choose the conveyancer on your behalf and pay the basic legal fee to those who are remortgaging their existing property. This incentive can also be offered by some lenders to those who are purchasing a property.
Mortgages with special offers attached may not always represent the best deals on the market; your mortgage adviser will be
able to help you choose the most appropriate deal for your financial circumstances.
Lenders secure your mortgage against your property through a legal charge, so if you fall behind with payments and no other solution can be found, then the lender can repossess your home.
If you get into arrears or find it a strain to keep up with your monthly payments, you should seek advice as soon as possible. Your adviser may be able to find you a mortgage deal that is more affordable, perhaps with a lower interest rate or one that can be repaid over a longer period of time.